Post-Reveal Stock Price

[Scott Beall]

@Tinker71 brought up an issue in another thread about what will happen to TSLA stock price after the 11/30 reveal. That got me thinking about selling some now and buying it back later.

So given the fact that nobody knows what will happen, what do you predict will happen to TSLA stock on 11/30 or 11/31?

My guess, given the cliff dive that the stock took after after the mild Q3 earnings call, is that no matter how great the Cybertruck will be at launch, it will “not meet expectations” of the press and TSLA will drop for a while. It was at $113.06 on 1/2/23. Maybe we’ll see that price again.

BTW, I have no credentials or skill at investing so my opinion is worthless. I’m just curious.

What do you think?

 

[Tinker71]

Thank God there isn't a 11/31 so we don't have to worry

 

[Tinker71]

Thank God there isn't a 11/31 so we don't have to worry

@Tinker71 brought up an issue in another thread about what will happen to TSLA stock price after the 11/30 reveal. That got me thinking about selling some now and buying it back later.

So given the fact that nobody knows what will happen, what do you predict will happen to TSLA stock on 11/30 or 11/31?

My guess, given the cliff dive that the stock took after after the mild Q3 earnings call, is that no matter how great the Cybertruck will be at launch, it will “not meet expectations” of the press and TSLA will drop for a while. It was at $113.06 on 1/2/23. Maybe we’ll see that price again.

BTW, I have no credentials or skill at investing so my opinion is worthless. I’m just curious.

What do you think?

I think you are about right. I plan to take advantage of a $100 dip. I have played the dip a couple of times, but not to the extent that I plan to. I am no selling my pre 2018 holdings though.

I am probably affecting the market right now and should shut up.

 

[PilotPete]

What do you think?

I think that there have been enough "leaks" and "random sightings" that any supposed disappointment is already baked into the current price. Unlike the Q2/3 calls, just about everything is now known about the CT. I expect an artificial drop when there is some reasonably reliable data on how many orders are dropping out. As I said before, there are two ways to measure sales conversion. One is the way we normally think of it, X sales/Y pre-orders. But if you look at entities that have pre-orders, you get a different number.

If there are 100 pre-orders, and A has 30 pre-orders (a company), and B has 10 (A flipper) and on and on, you might only have 50 entities holding 100 pre-orders. If those 100 pre-orders convert to 60 sold CTs, we would say there is a 60% sales conversion rate. BUT if the ONLY orders that didn't convert were A and B, then you have 48 out of 50 entities convert their orders to sales, and a 96% conversion rate. I think this is far more telling from a corporate view, and considering the huge pre-order backlog, more indicative of an actual conversion rate. For those trying to figure out when they will get theirs, the first conversion rate is more promising, if not as accurate. It would be beneficial to know of the ~2M pre-orders, how many separate entities are there. Elon may have hinted at that in the recent past when he said "over a million". We might have a near 2:1 ratio.

So what number gets released to the public that they believe first? That will tell you if there is a temp dip, big dip, small spike, or sustained spike in the stock price. I also believe that the analysts you see on TV are a very small percentage of what moves the market. I think they try real hard to get you to THINK they have their finger on the pulse and their words move the numbers, but like most of the news, I think it's all their facade for the sake of advertising. I think the bulk investors (generic funds, retirement funds, etc.) probably don't hang on Cramer's every word, but are smart enough to make up their own minds. Q4 call may cause a spike either up or down depending on what data is released then. I think the lack of increase or decrease in interest rates hasn't hurt the price. I think the leaked info from Cruise may cause some to increase the discount on the price because they will assume FSD is further away, some may see this as moving the needle in Tesla's direction.

But all these thoughts are what day traders and short term people are fixated on. I think in the long term, TSLA will more than double in the next 24 months, will likely go 5x in the next 7 years, and could hit 10x in 10-15 years. If you're focused on the long term, that's all that matters, What happens today or tomorrow is meaningless.

Full disclosure: I have TSLA in my portfolio

 

[HaulingAss]

The release of a new vehicle platform is a multi-year event. It took Tesla at least 5 years to get to this point, and it will take another two years for it to pay off all that investment. Like @PilotPete suggested, we know most of the important details from an investment standpoint, trying to guess the direction of the stock based upon the first sales is a fool's game. Micro-timing a stock tends to be counter-productive, which is why most active traders have lower returns than simply buying the S&P 500 Index and watching your investment compound through the years.

That said, people do like to try to time the market. Even though macro-economic conditions, things like interest rates and general market sentiment, will be the deciding factors, there is little doubt that some will try to play the timing game and that will move the stock up and down from where it would be without the day-to-day news resulting from the first deliveries.

But, even if I knew what those non-macro impacts would be (surrounding Cybertruck early deliveries), I wouldn't try to play them, based upon the unknowable macro influences.

I think the share price movements due to Cybertruck release specifics will be primarily the knee-jerk reaction to the relatively affordable price. This is likely to be a positive influence on the share price because it will show that Tesla is able to build and sell in large volumes, presumably at a profit. But the impact of that is only relevant relative to the greater movements caused by things like good or bad production and sales data of Models 3&Y (and to a much lesser degree, S&X), growth in the energy storage business, interest rates, and general market sentiment. Because the biggest impacts are unknown, playing the stock based upon the Cybertruck release is simply gambling. The biggest danger for a Tesla bull is they sell, even if only a portion of their position, and the stock rises and never looks back.

That latter scenario, while less than 50% likely, is the real "gotcha" here, because I firmly believe that TSLA is severely under-valued here on a five-year basis, and that includes taking into account the time value of money and the risks involved. When the opportunity is this favorable, the best strategy is to buy and hold, not play games with part of your position. This advice is worth a lot more than the $0 I am charging for it.

 

[CyberSleuth]

1. Nov 30th event starts. Elon drives onstage.
2. The audience goes wild
3. Elon laughs and gestures at the truck
4. The audience goes wild
5. Elon reveals mind-shattering features and capabilities.
6. The audience goes wild
7. Elon switches to the final slide, revealing 2019 pricing plus 5%. He says "one more thing" and a hidden Joe Rogan performs a judo flip out of the midgate and rolls down the tailgate ramp.
8. The audience descends into animal noises and fainting. Chaos ensues. People throw money and their first-borns at Elon.
9. The stock closes at $690 and a 10-1 split is announced.

Prove me wrong.

 

[kbolt]

The release of a new vehicle platform is a multi-year event. It took Tesla at least 5 years to get to this point, and it will take another two years for it to pay off all that investment. Like @PilotPete suggested, we know most of the important details from an investment standpoint, trying to guess the direction of the stock based upon the first sales is a fool's game. Micro-timing a stock tends to be counter-productive, which is why most active traders have lower returns than simply buying the S&P 500 Index and watching your investment compound through the years.

That said, people do like to try to time the market. Even though macro-economic conditions, things like interest rates and general market sentiment, will be the deciding factors, there is little doubt that some will try to play the timing game and that will move the stock up and down from where it would be without the day-to-day news resulting from the first deliveries.

But, even if I knew what those non-macro impacts would be (surrounding Cybertruck early deliveries), I wouldn't try to play them, based upon the unknowable macro influences.

I think the share price movements due to Cybertruck release specifics will be primarily the knee-jerk reaction to the relatively affordable price. This is likely to be a positive influence on the share price because it will show that Tesla is able to build and sell in large volumes, presumably at a profit. But the impact of that is only relevant relative to the greater movements caused by things like good or bad production and sales data of Models 3&Y (and to a much lesser degree, S&X), growth in the energy storage business, interest rates, and general market sentiment. Because the biggest impacts are unknown, playing the stock based upon the Cybertruck release is simply gambling. The biggest danger for a Tesla bull is they sell, even if only a portion of their position, and the stock rises and never looks back.

That latter scenario, while less than 50% likely, is the real "gotcha" here, because I firmly believe that TSLA is severely under-valued here on a five-year basis, and that includes taking into account the time value of money and the risks involved. When the opportunity is this favorable, the best strategy is to buy and hold, not play games with part of your position. This advice is worth a lot more than the $0 I am charging for it.

When Tesla is the only financially viable automotive company in the US the stock will be backed by the US government the way GM is currently.

 

[HaulingAss]

When Tesla is the only financially viable automotive company in the US the stock will be backed by the US government the way GM is currently.

Over Elon's dead body! Elon hates the fact that the government meddles so much in private business. He supports strong regulation, in areas where regulation is needed, and then wants government to mostly stay out of the way and let the competitors duke it out, under the rules created, to see who can offer consumers the most compelling value.

 

[HaulingAss]

1. Nov 30th event starts. Elon drives onstage.
2. The audience goes wild
3. Elon laughs and gestures at the truck
4. The audience goes wild
5. Elon reveals mind-shattering features and capabilities.
6. The audience goes wild
7. Elon switches to the final slide, revealing 2019 pricing plus 5%. He says "one more thing" and a hidden Joe Rogan performs a judo flip out of the midgate and rolls down the tailgate ramp.
8. The audience descends into animal noises and fainting. Chaos ensues. People throw money and their first-borns at Elon.
9. The stock closes at $690 and a 10-1 split is announced.

Prove me wrong.

Good luck with that.

More likely the talking heads on TV seed viewers with uncertainty and doubt. They will say it's surprising that Elon brought it to market basically unchanged from the reveal, even after so many people were turned off by it's overly simplistic design, like a 5-year-old designed it with crayons. That he should have used the criticism constructively, to modify it into something that actually had wide appeal. They will talk about how traditional truck buyers are, and how they would be surprised if it converts many existing truck owners to such a non-convential form with all of it's limitations.

They will reiterate how Elon thinks they have dug their own grave with such a polarizing and difficult to manufacture truck. How it will take years for it to reach profitability (even though Elon clearly said "cash flow positive").

Only by the end of next year do I think it will become apparent that the Cybertrucks visibility is not only boosting sales of Tesla's other offerings, but on a path to significantly bolster Tesla's earnings for years to come while simultaneously eating into the high margin truck and SUV sales of Ford, GM and Stellantis, decimating their profits (and more) and threatening their very existence.

The stock price will follow when investors start to "get it", not before. It's impossible to predict when that is, so hang on and enjoy the ride!

 

[mgarciaknight]

Over Elon's dead body! Elon hates the fact that the government meddles so much in private business. He supports strong regulation, in areas where regulation is needed, and then wants government to mostly stay out of the way and let the competitors duke it out, under the rules created, to see who can offer consumers the most compelling value.

Are you kidding me?!? Tesla was built on government incentives and freebees! Musk always welcomed the EV handouts and then didnt contribute to the pot for many years! He contributed only when he sold stock to buy twitter, if not, his hand would still be extended, and we are stuck with the bill!

 

[HaulingAss]

Are you kidding me?!? Tesla was built on government incentives and freebees! Musk always welcomed the EV handouts and then didnt contribute to the pot for many years! He contributed only when he sold stock to buy twitter, if not, his hand would still be extended, and we are stuck with the bill!

False. Elon publically stated his preference for no subsidies, for gas or electric, many times. He was opposed to the IRA and fully understood how ridiculous it was that it was called "The Infllation Reduction Act". How do you explain that Tesla's most profitable years were after they had burned through the $7500 tax credits in 2019/2020 and before the new ones kicked in from the IRA, at the beginining of this year?

No company succeeds without benefiting from the helping hand of the government in various ways and, depending upon which industry that company is in, the benefits will be different. The oil and gas industry is the most heavily subsidized industry, by far, both in the US and worldwide.

Elon has been a vocal opponent of government subsidies for private businesses and it's pretty obvious he is sincere about that. But don't act irrational and question why he didn't leave them on the table. He took every subsidy Tesla was eligible for, just like his competitors. That doesn't mean he supports them.

What you need to learn is that individual and every business has to play in the sandbox that was dealt to them. Purposefully putting your company or yourself at a disadvantage because you think a subsidy shouldn't exist, does no one any favors.

 

[mgarciaknight]

False. Elon publically stated his preference for no subsidies, for gas or electric, many times. He was opposed to the IRA and fully understood how ridiculous it was that it was called "The Infllation Reduction Act". How do you explain that Tesla's most profitable years were after they had burned through the $7500 tax credits in 2019/2020 and before the new ones kicked from the IRA, at the beginining of this year?

No company succeeds without benefiting from the helping hand of the government in various ways and, depending upon which industry that company is in, the benefits will be different. The oil and gas industry is the most heavily subsidized industry, by far, both in the US and worldwide.

Elon has been a vocal opponent of government subsidies for private businesses and it's pretty obvious he is sincere about that. But don't act irrational and question why he didn't leave them on the table. He took every subsidy Tesla was eligible for, just like his competitors. That doesn't mean he supports them.

What you need to learn is that individual and every business has to play in the sandbox that was dealt to them. Purposefully putting your company or yourself at a disadvantage because you think a subsidy shouldn't exist, does no one any favors.

None the less, he gladly, willingly, and open handed took them. Then after, he bites the hand that fed him for many years. Thank you for proving my point. That is all I was saying. Right or wrong was not my purpose, just the fact that it was done.

 

[HaulingAss]

None the less, he gladly, willingly, and open handed took them.

Of course he took the government handouts. And he's still taking them. Big shareholders would have sued him if he left them on the table due to his personal beliefs. It would have been financial negligence on a massive scale.

You don't know much about public companies, do you. I get a real charge from people who like to criticize others without knowing the first thing about what they are talking about.

 

[Crissa]

False. Elon publically stated his preference for no subsidies, for ...

That doesn't make the statement false. Tesla (and all of Elon's companies) have always tried to get every single advantage from public monies.

His preference for no subsidies was 'Tesla doesn't need them anymore' - but then Tesla made sure as many of their cars and batteries qualified as possible.

-Crissa

 

[JBee]

but...

If the government is manipulating the market anyway, you'd be a fool not to leverage it for your own benefit to stay competitive and keep the company alive.

That doesn't mean you can't wish it wasn't so, rather that you have to act according to how it is, because it is out of your control.

The point is that the government should meddle less overall in a market, but for that to be sustainable, we also have to make better decisions, and be held responsible for them if they fail. Classic case of trading security for freedom.

Now given the government has as EM puts it: "a corporation in the max with a monopoly on currency and arms to defend it", what choice does anyone have except to submit to the power of the coin?

All our perceived choices of freedom are economic ones.
We can only do what we can afford, but can't do what we can't afford to do.